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Three reasons why Steve Ballmer will resign from Microsoft (in 2010)

Reuters reported recently that Steve Ballmer will earn a $100,000 less this year.

Steve Ballmer is a billionaire. He has an estimated wealth of more than 11 billion. Do you think he cares about making $ 100,000 less this year?

Well, I think he does. A lot.

It must suck to be Steve Ballmer.

Sure, the money and power is great but he just never gained the admiration and respect he must be yearning for. Take a look at some interviews recently and you will have a hard time finding one where there isn’t a comparison being made between Apple and Microsoft or Jobs and Ballmer. Every time Jobs is mentioned you can almost see Ballmer cringe.

You would think that at least other CEO’s and managers respect him right? Well, not according to Forbes CEO Approval tracker. For years now poor Ballmer has been getting nothing but bad reviews from his peers who read Forbes. Compare that to Steve Jobs’ ratings and the contrast is stunning.

Screw those managers right? As long as investors keep loving Microsoft who cares about the rest of the world? Well, no luck there either. Microsoft’s shares have started losing their value the day Steve Ballmer took over as CEO and seem to have never recovered.

So how unfair is this exactly? Isn’t he the greatest manager of all time steering one of the biggest and most powerful companies in the world? Well yeah, but he seems to be steering it into the ground. The news of Ballmer’s bonus being slashed is the first, but telling, sign that Ballmer is on his way out.

That is a bold statement so I will repeat it: Steve Ballmer is on his way out.

Let me tell you why I think that Steve Ballmer should and will retire from Microsoft (or announce his retirement) in January 2010.

1: in January 2010 Steve Ballmer will have been the CEO of Microsoft for exactly 10 years
2: in that time Microsoft has lost more than half of its stock value
3: there isn’t a single product or service that was launched under Ballmer that is successful today

Shareholders have been patient with Ballmer. Compared to the shareholders at most other companies they must have been comatose.

Consider Carly Fiorina at HP. She was CEO of HP from July, 1999 till February, 2005 and saw HP’s stock price fall from $52 per share to $21. She also spearheaded a controversial merger with Compaq which didn’t show immediate results so she was forced out as a result. Declining stock, bad deal with Compaq, and she’s out. Business as usual really.

So how different is Steve Ballmer from Carly Fiorina? Well, his stock didn’t exactly decline 59% in 6 years. It declined 53% in 10 years. Slightly better than Fiorina but any other CEO would have been forced out long ago.

So what did Ballmer do these past years? He doubled the employee count from roughly 30,000 to more than 60,000 and managed to multiply his revenue almost 2,5 times over (from $19.75 billion in 1999 to $60.42 billion in 2008) and almost tripled Microsoft’s net income from $7.79B to $22.49 billion. Not bad at all right?

Not unless you take a look at the worldwide PC sales numbers. Those tripled too in the same period: from 130 million PCs per year in 2000 to an estimated 330 million in 2009. All Microsoft was able to do is grow with the flow. Computer sales grew 2,5x and Microsoft’s revenue grew 2,5x. But they didn’t really grow, they only just ‘kept up’ with consumer demand. That’s all memorable but hardly what you would expect from a great company.

This Thursday Steve Ballmer is being interviewed somewhere in the Netherlands and I’m going to be there. If get a chance I will ask him about his plans for the future. I’m not assuming he will confirm my theory of course but it is interesting to hear how he feels about his achievements these past 10 years.